Money Rehab with Nicole Lapin - Nicole’s Offer on a House Was Rejected. The Reason May Surprise You.

Episode Date: February 5, 2024

After scouring the Los Angeles rental market, Nicole found the one— the perfect house. She put in an application right away and… she got rejected. It gets weirder. The rejection wasn’t about the money. The actual reason Nicole’s application got rejected is much more bizarre. To tell this story, Nicole brings on expert real estate broker Erik Miles. Originally aired 5.2.22 You can find Erik at: Agent page: https://www.compass.com/agents/erik-miles/ Social: @erikmilesre @erikmilesgroup EMG website: www.erikmilesgroup.com

One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no maintenance fees, fee-free overdraft up to $200, or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. When you check out Chime, you'll see that you can overdraft up to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that

I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then, that wouldn't even be a story. Make your fall finances a little greener by working toward your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. Chime. Feels like progress. Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A. Members FDIC. SpotMe eligibility requirements and overdraft limits apply. Boosts are available to eligible Chime members enrolled in SpotMe and are subject to monthly limits. Terms and conditions apply. Go to Chime.com slash disclosures for details.

I love hosting on Airbnb. It's a great way to bring in some extra cash, but I totally get it that it might sound overwhelming to start or even too complicated if, say, you want to put your summer home in Maine on Airbnb, but you live full time in San Francisco and you can't go to Maine every time you need to change sheets for your guests or something like that. If thoughts like these have been holding you back, I have great news for you. Airbnb has launched a co-host network, which is a network of high quality local co-hosts with Airbnb experience that can take care of your home and your guests. Co-hosts can do what you don't have time for, like managing your

reservations, messaging your guests, giving support at the property, or even create your listing for you. I always want to line up a reservation for my house when I'm traveling for work, but sometimes I just don't get around to it because getting ready to travel always feels like a scramble, so I don't end up making time to make my house look guest friendly. I guess that's the best way to put it. But I'm matching with a co-host so I can still make that extra cash while also making it easy on myself. Find a co-host at Airbnb.com slash host. Hey guys, are you ready for some money rehab? Wall Street has been completely upended by an unlikely player. GameStop. And should I have a 401k?

You don't do it? No, I never have. You think the whole world revolves around you and your money. Well, it doesn't. Charge for wasting our time. I will take a check. Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg.

The only financial expert you don't need a dictionary to understand. Nicole Lappin. I'm actually going to bring today's guest on so we can introduce the topic together. Eric, welcome to Money Rehab. Thank you for having me, Nicole. I'm honored to be here with you. I am honored to work with you. You are such a badass real estate broker. You're even featured in my latest book. We've been working together for a bunch of years. You are the best of the best.

And lately, we've been working together on finding a rental. I asked you to come on the show to talk about tips, of course, for navigating this insane, insane, insane housing market. And we will definitely get to that. But after I invited you on the show, this crazy ass thing happened to us and we have to spill the tea. We have to talk about it first. Can you set the stage? I would love to set the stage. So we were looking for a writing retreat for Nicole. We wanted something special where she could be inspired and kind of have like a quiet space, you know, to work from and create. And we were looking in, you know, some wonderful neighborhoods, Bel Air, Beverly Hills. And we stumbled across a really, really cute cabin that has been completely remodeled and redone. It has kind of a famous history as well.

And so we kind of started to kind of look around and poke around at that house. Yes, we looked at that house. It was so cute. It was like out of a movie if I had described what I was looking for to a Hollywood set designer. So we went to go see the house and I was like, let's put an offer in. Yeah. So it's, it's kind of like an idyllic cabin, right?

Like if you pictured a cabin, that's like Instagram will go Instagrammable. And this was it. Enchanting gave it, you know, we got to keep Nicole safe. You know what I'm saying? And so it was great. And so we really liked it. There were a few things with the property, but overall we thought that it'd be a really nice opportunity for Nicole. And so we did our diligence. Nicole is very savvy with money, as we all know.

And, you know, she had some questions about the pricing. And, you know, I always rely on data. And I said, Well, let me get to that. Let me go look. And I, you know, Nicole can be pretty sharp, but I actually agreed with her. I was like, you know, so if we're getting here is the only way I know how to tell a story, Eric is to tell it honestly. And let's just let's just throw out the real numbers. So this place was listed for 9500. Okay. And so I said this place is while adorable, should not be 9500. Like, it's just it's offensive to me. Let's pull the comps. Can you tell us what comps are? And then can you tell us what you found from them? I would love to. So comps are the easiest way to describe it.

Comps are properties that have similar characteristics to the subject property that you're considering. And in this case, Nicole felt like the price was high. And I always like to go to the data because the data is what we can rely on and leverage to our advantage in some cases. And so when I took a look at the data, I agree with her. The best comp, and there was only one, was actually $8,500 a month. And that property had more square footage. It actually had a view of Los Angeles. It was absolutely stunning. And the home we were looking at was great, but it was a thousand dollars, um, you know, too high.

And so we agreed that we were going to make an offer, but at the market value, which was 8,500. Yep. So we, we, we made our offer and we submitted it and, you know, the agent said, Hey, look, Eric, I'll, you know, I'll discuss this with our seller and get back to you now also, because we were coming in under asking, it is typically a seller's market and it's also a landlord's market in Los Angeles right now. And so I, you know, in establishing rapport and trust, which is very important when you're trying to make a deal, I just reached out to the agent and said, hey, look, we kind of have a different

pricing valuation on this one. I want to let you know that we'd be coming in under asking, how do you feel about that? And she strongly encouraged us to submit it, even though we were under asking that she would do all that we can. And that's all you can ask for from an agent is, hey, give us a shot, letting you know we're coming in under. So we felt good about that. And we also felt that relative to the market that our offer was highly competitive. It was a fair value. Yeah, it was thoughtful. It was thoughtful. In addition to that, we included information about how Nicole would be a great ideal tenant. She would be lightly living in it and using it seldomly. And so we waited for their response. And I was bugging you. And I'm like,

okay, well, I get it. LA is cuckoo bananas. A lot of real estate markets are cuckoo bananas in that, you know, they're on the market for one second and then they're snatched up or they go for over asking. So I kind of had a little bit of remorse, like, oh, maybe I should have increased it more. Somebody's going to scoop this thing up. Like, where are we at? Where are we at, Eric? Like all the time. And then what happened? Well, so and one of the things that we also recognized was that it had sat on a marker for a little bit. It had been on there for about what, like 15 days, which in this market, which is another indication that they were asking too much. So we did feel good about our offer, all things considered. And then we got an email back that was, that was, it was short. I don't know if the

word is curt, but it was, it was, it was short and it said essentially no. And, and that was all that was in the email. And so Nicole and I were like, this seems off given the conversations, the communications that we've had with the other side for about a week at this point. I mean, they were lovely at the showing. They provided private access in the evening for us. They knew that Nicole wanted to go back in the evening to check it out. They were kind of patient with us in that regard as well. And so kind of getting this really kind of short email response that was a hard no without a counter seemed a bit off, particularly given our offer was price-wise, was something that you would think that they would respond to.

And so Nicole and I kind of texted back and forth. It was like, that's weird. And if you know Nicole, Nicole said, Eric, what's going on here? And she wanted to know what happened. And I said, you know what? I agree with you. I think that this seems a bit off. Let me kind of find out, you know, let me get the lowdown, so to speak. Yeah, because I was like, should we increase the offer? Like, you know, should we do some concessions? This is a negotiation. Mama loves negotiating. So like, bring it true. But then I also wanted to see exactly what was said, because I overanalyze everything. So you sent me a screenshot of the actual email passing and said, Dear Eric, thank you for your application. Our client is passing on the offer. Thank you for

all of your efforts. And that's it. And I was like, this is like, this is something I've never had before. Like, I do love my favorite sport, as everybody listening knows, is negotiating and perhaps the only cardio I get. And I love it. But this, this was like, the door is closed. And I was like, this is, is this about me? And you're like, no, no, no, like, like, let me call, let me call these folks and like, whatever. Then what happened? That I called those folks and it was about Nicole. I wish I didn't say I told you. So I really wish in this one, but Holy hell. It was personal it was it was like we will not rent to Nicole Lappin you you are not invited to this rental yeah no soup for Nicole like they did not want to work with you and you know um you know it's like I guess you've reached a level of fame Nicole where you know, it's like, I guess you've reached a level of fame, Nicole, where, you know, you got some haters out there, but you know, you ain't got no haters.

You ain't popping. I love it. You're not doing something if people don't like you. I mean, I didn't know that this was a whole other level of success where I'd actually be rejected from giving people my money, but cool. And, you know, I'm not at all upset or embarrassed about this. In fact, we're like spreading this information because I'm proud of it. And I think there's a lot of things that you can learn from it. So the folks said, I'm not even going to say if they're, I'm not going to do any, you know, distinguishing factors here. We're going to keep it all anonymous. Yes.

But all the other facts are totally true. So you talk to the folks and then what happened? And they told us the reason. And I had to tell you, which, so there's a couple of things. You're a longtime client, but you also share a birthday with me. We've known each other for years. We are friends. You know, I care about you and your wellness. So there were all these layers and we both like to win and typically do win. And so there was a lot of things I had to process before I spoke to you. How do you tell Nicole? What do you say to Nicole? All these things, like it was awful. And the thing about it

is like, you know, you know, for you, for me, it was, it's a little old lease, a little old cabin, but it was like, it was big. It was bigger than that. And that's the thing about real estate. It's like, it's not, it's never about the money. It's like a relationship business about the services about the client. And so it's a home, right? Exactly. And so like, there was all this thing, all these things I had to process to kind of, to, to share this with you. And I, and I, and I, it was the first time I'd ever encountered that also. I mean, I've seen so many things over the years. Um, I haven't, you know, come across, um, this, so, you know, we had to talk about it. And so,

net net, they were like, we know somebody that you know, and there's some beef or something like it was vague beef. Yes, they yes, they someone in your network, they know someone in your network, and they did not, you know, either like what they heard or like what they know of Miss Nicole. Hold on to your wallets, boys and girls. Money Rehab will be right back. One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no

maintenance fees, fee-free overdraft up to $200, or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. When you check out Chime, you'll see that you can overdraft up to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then, that wouldn't even be a story. Make your fall finances a little greener by working toward your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. Chime. Feels like progress. Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A.

Members FDIC. SpotMe eligibility requirements and overdraft limits apply. Boosts are available to eligible Chime members enrolled in SpotMe and are subject to monthly I love hosting on Airbnb. It's a great way to bring in some extra cash. But I totally get it that it might sound overwhelming to start, or even too complicated, if, say, you want to put your summer home in Maine on Airbnb, but you live full time in San Francisco and you can't go to Maine every time you need to change sheets for your guests or something like that. If thoughts like these have been holding you back, I have great news for you. Airbnb has launched a co-host network, which is a network of high quality local co-hosts with Airbnb experience that can take care of your home and your guests. Co-hosts can do what you don't have time for, like managing your reservations, messaging your guests, giving support at the property, or even create your

listing for you. I always want to line up a reservation for my house when I'm traveling for work, but sometimes I just don't get around to it because getting ready to travel always feels like a scramble, so I don't end up making time to make my house look guest-friendly. I guess that's the best way to put it. But I'm matching with a co-host so I can still make that extra cash while also making it easy on myself. Find a co-host at Airbnb.com slash host. Now for some more money rehab. So we had this conversation and you said it doesn't matter. Like you could give them $9,500.

You could give them $10,500. You could give them a million dollars. They do not want you in their property. And I was like, I was just, I thought you were punking me kind of. It was my instinct when I saw the email, but I was like, that's not a thing like that. I've never experienced that, but you've actually experienced this before with some other clients. Yes. Yes, I have. So we work in Los Angeles, right?

And so entertainment is one of the biggest industries here in town. Everybody knows that. And I've been fortunate to work with artists, entertainers, actors, people in music, sports, et cetera. actors, people in music, sports, et cetera. And you do run into situations where landlords just don't want to rent to certain talent. And I thought that it was kind of cool that Nicole's kind of up there with some of the bigger rappers in the world in terms of the scrutiny when being reviewed for a lease application. So I mean, that's kind of a feather in your cap, I think. I agree. So you've had folks reject other clients before for whatever

reason. They don't even need to tell your reason. They could not like your politics. They could not like your religion. They could not like whatever the way the way you smell like it doesn't matter. It's their house and there's no rules against why they can reject you even if you have perfect credit. I was like I'm going to pay them up front like there should be no financial problems here even though it kind of brought back some PTSD to the times when I did have shitty credit and I didn't have money and I it was really hard for me to qualify for a place. And now I was like, these days are long gone. But this is a whole other kind

of rejection that there's no government regulation on. There's no like you must rent to everybody who has, you know, higher than a 700 credit score or whatever. That's right. Right. Private property. score or whatever. That's right. Right. Private property. So the landlord, the owner can choose to rent to who they want to. And the reason was, you know, they can just decline. So, and that's the thing, right? So I was able to get, you know, more information maybe than I'm able to typically get in this case. But the reason was a no, you know, and if, you know, if they decide that they don't want to rent to someone because of the reason that they gave, they can do, even though it doesn't really sit well with me and you. But typically, they can just say pass. Even if you've, offers go in at asking or above asking.

Oh yeah. Yeah, absolutely. Yeah. So, so a property seller, a property owner can make these decisions based, you know, in their, in their discretion. So, you know, obviously I think the common ones are credits or, you know, there's like a mark on like a background check, that type of thing. But even if you have all the things in which your case you did, I mean, sparkling credit, you know, you're going to pay cash up front, you know, you know, you know, an amazing personality. Oh, thank you. I mean, clearly not everybody thinks so. Or somebody or people I know or whatever, whatever the reason is. But yeah, no, the financials were not an issue.

And it's taken me a long time to be able to say that. But I can proudly say that. And I do have a rap sheet or a record or anything like in my background check. Have you had any wild parties that I haven't heard about and haven't been invited to? What am I missing here, Nicole? Not yet. But now that I know it's so subjective, maybe I'm going to start. Because clearly, it just doesn't matter. So in the past, you've had, what's your guess? Like rejections because, you know, they don't like the person's public image or what?

They think they're going to have parties or or I mean, can we just be honest? Could it be race, too? I haven't. It's hard to say. I don't want to speak to things that I don't know. But I think that the problem that people who are famous or have celebrity that they have is that your reputation or your public persona is out there or your opinions are out there and i think that when that is the case there's just more room for subjectivity the sellers have more information and i think that that's one of the unique challenges of working with um people that have some measure of celebrity is that they the your the people on the other side already know more about those folks than my

typical clients do, or your clients that are more private, right? And so it's just another layer that we have to navigate around. And sometimes, you know, for example, I'm trying to think of, you know, you can think of, you know, there was, you know, during the pandemic, there was, in LA, there was this huge party for a house that was rented out and someone was seriously injured. So there's even more of a heightened kind of, I think, environment since the pandemic started with Los Angeles rentals in particular, where there's even more scrutiny, even for people of means. And so that's kind of just a new challenge that I think we've seen highlighted here in the pandemic since it started. Yeah. So it made me happy to recently see that these folks still haven't been able to rent their place out. And in fact,

they lowered the price to $85,000. To what? To the exact amount that we offered, which is a little bit more of a burn. Like doubling down on the no Nicole. I mean, I hope they never rent it. I hope that they bring it down to $50 a month and nobody wants it. Then they're going to lose their money. That's the thing about making decisions like that. It's like, you know, karma is karma is a real thing. You know what I mean? And so, you know, it is, it's been on the market. The world is small. The world is small. They've been on the market for like a month now.

They had to drop their price and then, you know, buyers started and tenants started thinking, well, is there something wrong with this? Um, you know, it also was a little small house. I mean, it was perfect for you and your needs, but it's a small little house that is asking top dollar. So good luck to those people. But we landed on our feet, I think. We wish them love and light. We did land on our feet. So we went back to the drawing board and we found, I think, an even better place. We snatched it up. We paid up front. We called it a day. For today's tip, you can take straight to the bank.

Stay tuned for part two of my conversation with Eric, where we tackle tips to navigate this insane housing market. Money Rehab is a production of iHeartRadio. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Mike Coscarelli. Executive producers are Nikki Etavoie and Mike Coscarelli. Executive producers are Nikki Etor and Will Pearson. Our mascots are Penny and Mimsy. Huge thanks to OG Money Rehab team Michelle Lanz for her development work, Catherine Law for her production and writing

magic, and Brandon Dickert for his editing, engineering, and sound design. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.